Budget 2020 is about investment in people

EMPLOYMENT is key to the wellbeing of any country and the APNU+AFC deeming the 2020 budget a private sector budget is disingenuous and can be passed off as political banter, Vice-President, Bharrat Jagdeo, has contended.
He said incentives were given for private sector growth and development as well as to put more disposable income into the pockets, especially of low income earners.
Acknowledging that the last occasion a budget was passed was in November 2018, Jagdeo said that, since then, over $300 billion was spent without any parliamentary oversight

Noting that the current budget is a $330 Billion budget, he said a significant amount has already been spent, either through roll-over projects from 2019 or through unauthorised spending for 2020.

There is another group of expenditure, he said that is not included in the budget that has to be cleared, and that relates to the Contingency Fund.
“So there has been a ‘drawdown’ on the Contingency Fund for 2019 and I have just discovered that it runs into billions of dollars too, outside of the spending of the Consolidated Fund,” he said.

Much of those spending, he said have gone into areas which are not transparent, pointing out that this does not come out much in the budget debates because of the technicalities.

“When people listen they must always remember that this budget is a budget made up of expenditure for the remaining part of the year, but money already spent and money that is rolled over from 2019,” he said, explaining, “So when Winston Jordon claims that the fiscal deficit went up, it did largely because of the unauthorised spending that they had and it is not because the PPP/C came in and put a budget that suddenly cause the fiscal deficit to go up.”
He said the current government had to put things in place to cover the unauthorised spending that was done under APNU+AFC administration for the past two years.

SITUATIONAL ANALYSIS
Highlighting that the coalition parliamentarians have been clamouring that the budget is a private sector budget, Jagdeo said the budget has to follow an analysis of the situation.

This analysis, he related, revealed that there was growth in the oil sector but the non-oil economy was in a disastrous state.
It therefore means that they were deficit in sectors such as mining, agriculture, fisheries, bauxite, manufacturing and the services sector, among others.
“Those are the sectors that generate jobs for our people, and, along with COVID-19, the situation in those sectors were even worse, more people lost jobs. A key part of the budget had to give stimulus to those areas to ensure that we resume activities in mining, accommodation, forestry, agriculture so more Guyanese can be employed,” VP Jagdeo said.

Focusing on other incentives, Jagdeo said: “the mere fact that we removed VAT on medicine that they had put there, we reversed it, and we even extended it to medication used in the private sector, so when people now go to a private pharmacy, they don’t have to pay VAT.”
He noted that the corporate tax was also removed from medical institutions in the private sector. Such will result in the investments in better equipment and private healthcare will expand, which will bring the cost down due to competition.
Adding that the same was done for private education, Jagdeo said that, hopefully, the fees will come down for parents sending their children to private schools while public schools will be upgraded.

INVESTING IN PEOPLE
“They took away the cash grant which was $1.6 billion from children. We brought it back and increased it to $15,000, so now that will put $2.5 billion back in the pockets of parents countrywide,” Jagdeo said.

Further, he said from January 2021 pensioners will get an increase of $5,000 on their pensions, and over the five-year period it will be greater. This increase will place $4.5 billion in the pockets of pensioners.

Adding that doubling the school uniform vouchers will also put hundreds of millions of dollars in the pockets of parents. Jagdeo said, further, that free water for pensioners will also place another huge amount back into the pockets of citizens.
“Winston Jordon always claimed he didn’t have fiscal room to do this, but taking away incentives from poor people; but we have shown there is room in the budget,” he said.

Pointing out that the thousands of sugar workers laid off will now be earning, Jagdeo said that the industry will resume and closed estates will be reopened.
“The money spent there goes across our country. Our country is heavily integrated, every cent spent in the economy impacts all of our people,” he said.
In addition, the vice-president said taxes were also removed from machinery and equipment.

“People don’t eat these things. When people buy a piece of equipment, APNU+AFC put on taxes on it. A bulldozer, for example, under the PPP/C was zero taxed; under APNU you had to pay over $5M in taxes. Now it’s back to zero,” Jagdeo disclosed.
These savings, Jagdeo said can be re-invested into businesses to employ more people and stimulate development.